All's fair in trade and war

Walter Kansteiner has a story about the enterprising spirit of Chinese businessmen in Africa. The former U.S. diplomat and expert on African markets helped an American company buy a potential copper mine in the Democratic Republic of the Congo. Within two days, he said, a Chinese metal trader called him about signing an agreement to purchase the copper.

"I had to explain there's no mine-it is probably five to seven years away from initial production," Kansteiner said. Not to worry, the trader replied, "We can start talking now."

Kansteiner's story, which he told at a Nov. 1 panel discussion at the American Enterprise Institute, shows how China hungers after raw materials to power its ever-expanding economy. Africa has become a valuable continent in that regard, with its copper, cobalt, iron ore, and timber, and is also a market for cheap Chinese goods.

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Last year, trade between the two reached $40 billion-having doubled every year for the past decade. Also, 30 percent of China's oil now comes from Africa.

By the summit's end, China and Africa had signed some dozen trade deals worth $1.9 billion, while President Hu Jintao pledged to double China's aid from this year's level by 2009. And Beijing has not stopped there, investing in much-needed roads, bridges, and railways, projects the West of late has largely avoided.

At the summit, a Chinese civil engineering company announced it had signed an $8.3 billion deal with Nigeria to build an 817-mile railway connecting Lagos in the south with Kano in the north. A similar project is already underway in Angola, where an estimated 10,000--40,000 Chinese laborers are reconstructing the war-ravaged, 835-mile Bengeula Railway at Africa's heart that once linked the Atlantic coast with Zambia and the Democratic Republic of Congo.

Despite the forum's pomp, China's growing influence in Africa is worrying both locals and Western analysts. Beijing's policy is strictly business, officials say, and the Chinese like to insist that they do not meddle in a nation's internal politics. That doesn't mean that business deals don't influence politics, only that China imposes no Western-style provisos on improving human rights or cleaning up corruption as a condition for aid and trade. And in turn, that means dictators such as Sudan's Omar al-Bashir and Zimbabwe's Robert Mugabe never lose essential financial props, even if the West stops investing or slaps sanctions on their nations.

Chinese ties to Africa reach back 600 years, when naval explorer Zheng He called at eastern seaports, sometimes returning with the odd giraffe as tribute for the Middle Kingdom's emperor. Under Mao, China's interest was ideological, backing African independence movements to build socialist solidarity. That, too, has passed, and now China's interest is purely commercial, though Beijing also likes turning itself into a major world power.

Some examples of the way China has gained influence in Africa:

Angola is now China's largest oil supplier. In 2004, China offered the southern African nation $2 billion in exchange for 10,000 barrels of oil a day. China agreed to reinvest in infrastructure projects, but at the same time ensured that almost three-quarters of those contracts would go to Chinese firms.

China supplies weapons: according to the Council on Foreign Relations, $100 million worth of Shenyang fighter jets to Sudan. Experts say Sudan's helicopter gunships are also Chinese, and have been used in aerial attacks on Darfur villages. Beijing argues that it has invested billions of dollars in building refineries and pipelines and must protect its assets against disruption and-in the case of Darfur-against UN Security Council action.

Public statements aside, China did not stay out of local politics for long, interfering in Zambia's September presidential election. Blustery opposition candidate Michael Sata riled Beijing by criticizing working conditions under Chinese traders-and said he would prefer dealing with Taiwan instead.

In Zambian exports, copper is king, and the Chinese are major investors in the industry. But one of their mines sparked riots by delaying to pay wages, and some 50 of its workers died in a mining accident last year.

Chinese ambassador Li Baodong quickly reacted to Sata: "Chinese investors in mining, construction, and tourism have put on hold further investments in Zambia until the uncertainty surrounding our bilateral relations . . . is cleared," he said. If Sata had won-which he did not-Li said China also might sever diplomatic relations.

South of Zambia in Zimbabwe, discontent with the Chinese is growing. Locals resent China's coddling of Mugabe, but also dislike the influx of cheap Chinese shoes and clothes. Businessman Simon Spooner told WORLD that flea-market goods, made in China, are gutting local manufacturing-but not with a better product.

A Chinese pair of shoes might only last three months compared to a local pair's year, but it is often the only footwear Zimbabweans can afford now with four-digit inflation. The goods are so substandard, locals call them "zhing zhongs." And now, by extension, "anything that doesn't work is zhing zhong," Spooner said.

Chinese goods flooded in about three years ago, benefiting from a new free-trade agreement. Spooner said oft-corrupt officials are also likely benefiting from the arrangement: "Publicly, they might raise the odd concern about job losses, but at the end of the day, they're not going to do anything about it."

So is China bad for Africa? While trade and investment are building some economies, other practices are potentially damaging. Joshua Kurlantzick of the Carnegie Endowment for International Peace says Chinese loans may re-indebt countries and its arms sales fuel conflicts: "In Africa's weakest states, where the rule of law often simply does not exist and economic policy makers do not enjoy the same kind of independence from politicians as in China, this state-led business model could simply be a disaster-an invitation for rapacious governments."

While U.S. aid and trade in Africa still exceeds China's, Beijing is catching up. Increasing U.S. trade, while encouraging economic reforms, would be good medicine for the continent. But that takes time. Meanwhile, eager businessmen like the Chinese metal trader are making long-range plans.